U.S. Spending on Claims Process Outsourcing Grew to More Than $10 Billion in 2003, IDC Reveals

FRAMINGHAM, Mass., May 25, 2004 � A new IDC study shows that U.S. spending on claims process outsourcing services totaled $10.1 billion in 2003, a 6.8% growth over 2002. IDC projects that the market (comprised of the commercial healthcare, government healthcare, and insurance industries) will increase to $15.7 billion in 2008, with a five year compound annual growth rate (CAGR) of 9.1%. The study also finds that the claims process outsourcing value proposition is gradually being accepted in the market, but growth is slow, owing to risk-aversion, difficulty quantifying the benefits, and the continued tactical evaluation of the outsourcing proposition.

“Despite being a relatively mature market, new growth opportunities are beginning to emerge in the claims process outsourcing market. Early movers are beginning to apply more strategic objectives to outsourcing, and this in turn is helping to drag the claims process outsourcing industry forward, slowly, but surely,” said Romala Ravi, program manager, BPO Services.

IDC research indicates that claims process outsourcing, though mature as a concept, is a relatively underpenetrated market. Companies looking to play in this market should set realistic expectations about market demand and adoption, meet demand where it currently exists, grab low-hanging fruit and use these as building blocks towards more comprehensive engagements, and prepare their pursuit teams to speak to and demonstrate both the tactical and strategic benefits of outsourcing.

This IDC study, U.S. Claims Process Outsourcing Services Forecast, 2004-2008: Market Opportunities By Key Vertical Industries (IDC #31261), analyzes the market opportunity and trends in the claims process outsourcing market for the commercial healthcare, government healthcare, and insurance industries. The study also presents a five-year forecast for the U.S. market, identifies the future outlook for this market, and presents recommendations for vendors looking to compete.